NBCC may redevelop land bank with sick PSUs

NEW DELHI: The government plans to rope in state-run developers such as NBCC (India) Ltd to maximise value from the sale of sick and loss-making public sector undertakings (PSUs) that failed to generate suitable investor in the initial round of bidding.

As per a plan shared by the government officials privy to the development, non-core assets including land and buildings of several weaker PSUs may be handed over to specialised state-run agencies for redevelopment to realise higher value or for sale through a bidding process.

The new measure is expected to end the almost dead run being encountered in the disinvestment of weaker PSUs including plans for strategic sale.

Earlier this week, the disinvestment plan for public sector aviation firm Pawan Hans faced yet another setback as it failed to attract any bidder. Last year Air India's disinvestment bid had also fallen flat for want of bidders. Similarly, efforts for strategic disinvestment in other loss-making entities such as Scooters India Ltd have also failed to move in the last one year.

Now, the Department of Investment and Public Asset Management (DIPAM) has drawn up plan for strategic sale in 35 PSUs, including Air India, Air India subsidiary AIATSL, Dredging Corporation, BEML, Scooters India, Bharat Pumps Compressors, and Bhadrawati, Salem and Durgapur units of steel major SAIL.

The new measure to rope in agencies like NBCC will help some of these entities to get overall higher valuations as their operations would be restructured between core and non-core activities and then put up for sale, in some cases after redevelopment of land or other assets for commercial use.

The Centre had framed guidelines on closure of loss-making companies in 2016, under which a land management agency (LMA) was to be appointed by the administrative ministry or the CPSE's board to assist in disposal of land.

In the new model, such activity could be taken over by another CPSE such as NBCC that can carry on the work of redevelopment on payment of a fee. The redevelopment work could include determining the current land use and its suitability for industrial, manufacturing or some other purposes.

Several sick PSUs are sitting on huge tracts of land that have the potential for providing huge gains after redevelopment and commercial sale. One such example is Indian Drug and Pharmaceuticals Ltd (IDPL) Company that is sitting on 834-acre of prime land in Rishikesh.

"The land of a few sick PSUs could be commercially utilised by other cash-rich PSUs for their expansion plants or other activities. This PSUs-led disinvestment plan for sick units would work best," said another government official.